>> welcome to "lunch money," where we tie together the best stories, interviews, and video in business news. i am adam johnson. all right, take a look at my menu today. and company, it is all about health and wellness from products to the balance sheet. in motors, how do you sell a $2 million bugatti? a high-speed and test drive of course. in nation, we look at the rewritten for the proposed men among wage. -- minimum wage. moving on in titans, life on the ranch. why this ex-hedge funder left wall street for ringer and liquid gold. it is all coming up today on "lunch money." and this is a big deal in the cable company.

>> it is official that comcast is buying time warner cable in an equity deal valued at $45.2 billion. >> $45.2 billion. that values time warner cable at $158.82 a share. i think we have heard that number somewhere before. >> would think we can create tremendous value by running this company on our own. if charter wants to transact $158 is the price. >> this was the cable love triangle. charter try to buy time warner cable but twc played hard to get. now, comcast was going to be in on that deal, potentially buying some of the assets. >> we were hearing that comcast was going to enter into a friendly agreement with charter to try to acquire time warner cable together, so the news that they have done an end run around charter and done a friendly

merger with time warner cable came as a shock to just about everybody last night. >> ok, so let's get past a surprised factor. buying the second-largest u.s. cable company brings comcast more than 11 million subscribers. it gives comcast access to new york city market and more provider content. so the question is -- how big does that make the new company? >> if you include directv, dish, verizon fios, at&t u-verse, comcast will have about 30% of all pay-tv subscribers, but if you look at this as just cable companies, comcast becomes really dominant, combining number one and number two. of course, you can also look at the world of tv viewing these days to include youtube and netflix and amazon prime and hulu, etc., and then you get a figure beyond the early percent, regulators will have

to make the choice -- are they comfortable with comcast owning so many cable subscribers and owning the nbc universal content portfolio? that is a lot of power in the industry for one company. >> oh, the regulators. if we know anything, washington will be looking for was stephanie ruhle likes to call a pound of flesh. >> anytime you combine a number one and number two in anything in this country, washington is going to be initially skeptical, but again, this deal will have to be scrutinized because it is not just perhaps cable versus cable here. it involves a whole lot of more players and what it means in terms of programming costs, the flow of information over the internet. the department of justice, the the fcc will have to decide is this in the public interest. >> and when it comes to the public interest -- >> will our cable bills go up? >> that is the question at the department of justice is going to look at. this is a very unusual type of merger, though, and that remember cable companies do not compete with each other. they have separate geographies,

so you get horizontally bigger, but it does not change the competitive dynamics one iota in any individual market, so the department of justice and the fcc will not be reviewing this through the traditional lens of hhi, which is the concentration index you would use. you could argue that it could actually lead to lower bills in that the combined entity, if the merger is allowed, will have more leverage to get lower programming costs, so that could flow through to consumers. >> ok, so cheaper programming, that is good, but think about the fact that more and more viewers are choosing to stream their video, so is there even a future for cable television? "in the loop" asked former cnn president and ceo jon klein. >> it is all about size, delivering of content, etc., whether you're in the former

phone company, verizon, at&t, all of these guys have to get as big as possible as fast as possible. >> and so in the cable industry at least, this is pretty close to a monopoly now. >> i do not know monopoly, but the verizons and at&ts our national networks, but a cable programmer is localized, and that might be changing. you suddenly have a company that has almost a national footprint, but they've got to have that in order to compete against alternatives. google is developing fiber that delivers 100 times faster speed than your cable or your phone provider does. >> and that is a good point. >> they are a national provider, google. >> how quickly do we think cable provider, who cares, right? >> young people think about that. if you talk to 25-year-olds -- our 25-year-old producers do not even have cable. >> no, and they do not need it. >> one thing that everybody is talking about today is the idea

of a monopoly, what is not being talked about today is the fact that comcast investors are going to have a lot tough questions because you pointed out the loser here, john malone. is he really, because comcast is paying a big price here you go and remember, malone was going into this with a different philosophy on how to use cash. he was going to take advantage of the cheap debt market out there. comcast is using very expensive stock. investors are going to have a real issue with this deal today, and that is one thing that they are going to have to get over. forget about d.c. -- we will talk wall street here and we will focus on what comcast and how comcast is going to message this deal to investors. >> so the comcast-time warner cable yield could provide the giants more leverage in the negotiating subscriber fees. these are what companies charge for content. >> this has become a big business, a wonderful business

for these media companies, which in the past were largely tied to advertising, but because of the growth of cable over the years, the other businesses basically materialized where the cable companies would end up paying those small cable networks some money to be carried by the cable company, and that became sort of their business model, and in the broadcast networks, the abc's, nbc's, cbs's were saying wait a minute, we can do the same thing, a lot of people are watching our programming and we spent a lot of money in a, and we want to be paid for it, and whenever they go into the court of public opinion, they generally win. you think about cbs and time warner cable having the blackout fight last year, and few people have sympathy for the cable companies, so the content players are able to get more and more of this revenue from retransmission fees. now they have to go back, have

the strategy talks, talk about how this affects them, cannot play time warner cable off of contest anymore. i do not know that it can make a huge difference for the biggest players like fox and others who already get paid pretty big content and already have a lot of leverage, but it is a pretty important story to keep watching. >> david bank, now that we have time warner cable and comcast as an entity, that is a different kind of beast entirely. comcast has always been different from the different cable operators because it has got the content to go along with the pipes. why have we not seen more deals like that? >> of vertical integration between content and distribution, well, look, i think we came through almost a decade of exactly the opposite. you had media conglomerates and simplifying their corporate structures, simplifying their business lines and returning capital to shareholders. >> coming up in nation, treasury secretary jack lew, what he has

to say but the debt ceiling extension and unemployment in america. plus, jobs are fizzling out of pepsi. we will look at how much the company is saving from those jobs. and talk about a close call. syracuse's perfect record was saved by this buzzer beater. the 19-year-old moved up the court and led a three-pointer fly. nothing but net. syracuse tops pittsburgh 58-56, staying undefeated, 24-0. look at that thing, oh, yeah. oh! ♪

>> this is "lunch money," on bloomberg television, and we are also streaming live on bloomberg.com, your tablet, and your smartphone. i am adam johnson. in company today, it is about health and wellness, even losing a little weight.

consider pepsi. america's largest food and beverage company beat earnings estimates and forecasts 7% growth, but there is a catch. >> it will be labor savings, and it will come from a variety of ways. it will come from making be distribution center more efficient, it will come from doing shared services with some of the work we have been doing, but i would expect about 40% to come from labor savings. that said, we historically have been very effective in helping people who are displaced find opportunities elsewhere. >> ok, now to nestle, even bigger than pepsi, it is the world's largest food and beverage company. slowest sales growth in four years and it too wants to slim down. here's the ceo. >> looking into our portfolio, whatever is not fitting strategically, not really the enjoyment of business, and we

will divest, we are going to do that much more forcefully. so these are the things we are doing. we have also another way of saying it, we have also quite a lot of sku's that we have, so we are really going for as soon as possible. we are a company that has a portfolio, we are a company that has a worldwide presence, but we have to bring strength for growth for the future. >> and whole foods stumbling today. profits trailing in the stock is down. the problem? everyone lives in an amazon world. even high-end markets face competition. this is especially true in the smaller cities where whole foods will try to expand. will they succeed long-term? we asked a blogger, one of the 50 most influential women in food. >> they do a great job of getting people to buy great ingredients, but there is another step to getting people -- >> you have to know what to do with it. >> are the customers in the kitchen?

>> in 2014, most grocery stores, milk is the farthest away from the front door because they want you to go back to the milk. in the whole foods, it is kale, and they run out of it. what is it about kale? please explain to me kale. >> it is a superfood. and quinoa. they are the most searched ingredients on our site, quinoa and kale. >> are you kidding me? the most important search for me is pizza. >> speaking of pizza, our single best chart takes us up nicely. thank you, tom. we eat pizza a lot in america. about one in eight americans consume pizza a day. this is from the u.s. agricultural report called what we eat in america and it turns out boys between the ages of six and 19 lead the way. one in four of them eat pizza on any given day. >> are you leading research on this and your house? >> we experienced this daily. >> where are we on junkfood? >> pizza is not junkfood.

it contains milk and cheese. >> it is a lowest common denominator food. it sounds bad, but it is like one of the universally loved foods, so when people get together, people serve pizza because they know it is safe. >> you and others have revolutionized the food business. where will we be in five years? >> i think sort of more -- i think people will be eating better. i mean people are eating kale. five years ago, people would not have been considering it. >> are you growing kale in your backyard? >> enough about health foods. do you like cinnamon buns? yeah, i like them, and they like them in libya as well. this was the first u.s. company to open there after the government collapsed and the key to the whole thing was logistics. >> setting up the supply chain is number one. if you cannot get the product there, there is nothing to sell. >> chobani. >> they got stuck in new jersey. setting of the supply structure

month and years in advance is key. and then to find a supply structure that understands the market, the governments, the regulations, and really has the ability to invest in the infrastructure. we opened almost 100 cinnabon locations in under three years in russia. that is no fluke. that is a testament, and they are all profitable. >> have you borrowed anything from what mcdonald's does? >> they have pioneered so many other countries to figure out where they have failed, where they have been important, and how do they tweak the concept to be relevant in those markets? franchise partners are one thing, but if you cannot set your pricing strategy in such a way that the economy can't afford it, you won't have a sustainable retail model.

what do they change, what do they tweak? >> i want to get straight to some breaking news, prime -- another big number, 2.6 billion. that is how much a retired hedge fund minister is worth. plus, jaguar is out with its first port car in a long time. we got all the details. it is coming up in motors.

>> this is "lunch money" on bloomberg television. we are also streaming live on

bloomberg.com. in motors, if you are in the market for a $2 million car, you are in luck. bugatti once your business. the company has a unique sales pitch to win you over. >> i have never seen anybody get out of this car and sigh, that wasn't what i expected. it is a very positive experience. bugattiduced the dynamic drive experience in north america last year. these events have been very successful in attracting new people to the brand. we're going to host four of these events around the country this year. we will bring in 20 to 25 per weekend. they will experience the car on the open road and then we will close down a public road for high-speed drives or perhaps have a closed runway. --ay, we have the beyond the

bugatti grand sport come of the fastest open top car in the world. important -- imported to north america, it costs about $2.5 billion. i have seen them range anywhere from $2.4 billion to $3 billion. goal with this drive experience program is to attract individuals who perhaps never had a chance to experience the brand before. typically these are individuals who are very serious about cars. they want to experience it first. we do have previous owners who come and want to get back into the brand. cars that ween top are ever going to build, only about 40 remain available worldwide. we anticipate this will be sold out within 12 months and there will be another model coming but we won't introduce anything within the next few years. >> awesome. on to jaguar.

we have been waiting a long time for a new sports car. finally, it is here. can say that jaguar has always been known as a sports car brand. the f-type represents the return of the jaguar sports type after years off the market. having that back in our lineup really casts an amazing mind overall brand. it is one of the key reasons our sales are up 40% for 2013. when you talk to our design director and the way he approached this, it was to take the sports car onward into the future, but respecting all the heritage we have had. this is the first time we have r version of the f-type/ .

the fastest ever time for a jaguar production car. it starts at $99,000. it is a great value if you think about the performance it offers relative to the usual suspects in the sports car space. we are very different from the german big players. we offer something more exclusive and a little different from a performance perspective. i think that is what will drive our momentum. jag was originally called the swallow car company. need to make a lot more than $10.10 if you want to buy one of those cars. we will take a look at the proposed minimum wage increase. that is coming up in nation. plus, we look at why whiskey is winning. ♪

>> this is "lunch money," on bloomberg television, and we are also streaming live on bloomberg.com, your tablet, and your smartphone. i am adam johnson. today's moving picture where the video is the story. clashes between rival parties in johannesburg are the latest sign of tension. south africa heads stored a general election in may. partyters say the ruling hasn't done enough to create jobs. the converted u.s. cargo ship docked in spain on its way to destroy syria ostomy weapons. the next port call will be in italy. there are two large machines on

board which will neutralize agents to render those weapons unusable. and snow kidding. another winter storm hitting the northeast here in new york. getting anywhere from eight inches to 12 inches in new york before he moves in new york before he moves into new england. it has already coated parts of the southeast and dump series no on washington, d.c. in nation, president obama signed an executive order yesterday raising the minimum wage to $10 10 cents an hour for government contracted workers. his larger goal -- expanding that rate across america. the minimum wage is the cover of the latest edition of "bloomberg businessweek." though truth be told, we created six different covers for this issue. that is how complex this issue is. we spoke with economics editor peter coy. >> this is not an easy issue. it has so many different moving parts to it. the strained economics, about which there is more russian than

there used to be, and then there is kind of the whole moral issue, like what is "right," and then there is the engineering issue, given the fact that you have different answers from the economic than the social justice, what ultimately should you do? >> peter, $10.10 is about half the median wage in this country. how does that compare a story to -- historically to what we have seen? >> that goes back to the way it was may 1960's and 1970's, but it had declined. the $7.25, which had been the minimum wage and since 2009, is well below half of the median wage, and it has lost buying power. bringing it up to $10.10, which is the president's proposal, not just for this executive order but for the federal minimum wage in general, would put us back into historical line. it would be by a narrow margin the highest ever in terms of buying power. >> i looked, peter, at the

minimum wage, and i look at the research that you have done. what is the republican state, those against raising the minimum wage, what is their most cogent point? >> well, philosophically, they argue that the minimum wage is interfering with private contracting between consensual adults, and there is no reason the government should get involved in that. if somebody wants to work for a certain amount of money, somebody is willing to pay it, why should the government get involved? but if you don't buy that, if you don't buy into the libertarian philosophy, you might still think that the people against the minimum wage have a good point, which is simply that it could destroy jobs. the idea is of course he might be worth five dollars an hour to an employer, but you are not worth $7.25 or $10.10, so you will lose and be out of work. >> you can read peter's. or a -- you can read peter's full story in the latest issue

of "bloomberg businessweek." charlie rose interviewed treasury secretary jack lew and asked about the extension of the unemployment benefits. >> i hope we are not done with this debate. unemployment benefits being extended is very important. the short term unemployment rate is approaching historical levels, and the long term unemployment rate is staying quite high. it is not because people do not want to work. there are all kinds of complicated reasons that once you are out of the workforce for more than a couple of weeks, a couple of months, it is harder to get back in. people who are trying to find a job in an economy where it is still challenging for them to find a job need to have extended benefits. >> do you believe we can get back to full employment that existed before 2008? >> i think we are still -- >> can we get there, and how long? >> i'm going to have to resist trying to predict how long, but

i think we are going to see the kind of recovery that gets us back to a place where people who are looking for work can find work. i think it is going to require that extra effort both in terms of giving people a chance, as we were just talking about, but also making sure they have the skills they need. if the job you had is the job it is no longer available, we need to make sure you can get the skills for the jobs that are available. >> secretary lew also spoke about the significance about the clean ceiling extension that was just passed. >> that takes away the threat of a self-inflicted wound, which would have only hurt our economy. so i am an optimist. i think if you have a couple of months where you see the benefits of making decisions and working to get things done, there is more we can do. i do not think things like and -- infrastructure or artisan , in almost four years,

working on these issues, i think it is fair to say that republicans and democrats alike want to build a better company and want to invest more. we need to have a conversation about how to do it. >> mentioning infrastructure, someone said to me look, it is the time to invest in our future, but we are not doing it the way we should. >> i agree that we are not investing as much as we should. i think this would be a time where we would be wise to be putting resources into the things we are going to need to be a vibrant economy for the rest of the 21st century. when i talk to ceo's and i go across the country, the two things that i hear from them, the questions they ask when they decide whether to invest in the united states is the infrastructure to get what we need in and out of our factories, and will we have the workforce that we need not just today but five years, 10 years, and 20 years from today to fill the jobs that need to be filled? and i think the answer to both of those questions is yes in many cases, plus we have abundant energy resources, that

are making the cost of doing business cheaper, but we have to make sure the answer five years from now and 10 years in our yes, and we need to know we do not have the infrastructure, the roads, the ports and the airports that we are going to need. and we know that we could use the good of middle-class jobs to build those things now. so we are very much going to try to get more investment in those areas. >> you can catch the full "charlie rose" interview with the treasury secretary tonight 8:00 and again at 10:00 p.m. eastern time. 1800 acres, and this is the life of hedge fund leader now rancher tom steyer. and we are looking at how booze is booming. and take a look at this -- 2500 couples at the unification church tying the knot together. husband and wife were matched up by the church.

they traveled from as far as canada in order to participate. get this -- the guest list -- 20,000 people had attended. ♪

>> in titans, tom steyer started a hedge fund in 1986 with $8 million, and by the time he set down in 2012, $30 billion. the farallon capital management company will become the largest hedge fund in the world. part of our latest edition of "titans of the table," he gave our betty liu a tour of his 1800-acre ranch in scenic northern california. >> the northern california coast is one of the most picturesque

places in the united states, so it is no wonder that this is where billionaire tom steyer spends his free time. just a few miles inland from the pacific is the 1800-acre ranch steyer and his wife, kathryn taylor, bought in 2002. only an hour outside of san francisco, it is a world away. running this huge ranch -- how is it different than running a hedge fund, a $20 billion hedge fund? >> it is incredibly different. it is the same in the sense that you think it looks like an asset, but it is actually dramatically changed by the people who run it. and that is exactly like every organization i have been in, having great people at the top, it is unbelievably significant and powerful, and that is where the comparison ends. >> tomkat ranch has a team of 15, including scientists who study ecologically fit ways to

raise cattle. >> you basically move the animals from place to place. that is how the animal moves across the plains of the earth. what we would think of is real success, if it turns out scientifically that we are right, if the way we are grazing the different animal causes the land to soak up twice as much carbon as normal. >> steyer has always bucked against conventional wisdom. he and his wife decided to settle here near their alma mater of stanford university. >> i intentionally chose not to live in new york city. i never felt that i was really part of that community, even though i had lots of friends. >> is that why you left wall street? >> we did not think it would be

a great place to have little kids. and if you like the outdoors, this would be hard to re-create. >> steyer tried to get out to his ranch a few times a week. in addition to raising grass-fed cattle, the ranch plays host to local school children who come to visit dorothy, the 300-pound pig. >> "titans of the table," a half-hour session with tom steyer, airs tonight at 9:30 p.m. tonight here on bloomberg. and coming up, the whiskey business. ♪

>> in whiskey, people are getting thirsty for rye. this week, the reports that whiskey grew over 60%.

-- grew about 6%. that report shows that total revenues are also increasing about 10% and what is really stealing a lot of it is rye. meet whistle pig. this is one of the new whiskeys, "details" magazine called whistlepig the best new age whiskey in america. >> in our area, old rye whiskey is virtually uncontested. there is really no old american rye whiskey. really over 10 years old, over six years old, over seven years old, anything from the aged segment. traditionally speaking, you do not see an age statement on the bottle, which is why the high end of whiskey, domestically and globally -- >> would you please explain while my youngest child is spending $70 a bottle for whistlepig? >> perhaps you do not value your youngest child for wisdom and value purchases. she has a real eye for value.

>> what he is getting at is distinction. what sets whistlepig apart? >> listen to you. >> you know your stuff. >> the whiskey is a friend of age. we have never in the united states allowed our whiskey to age long enough to meet its full potential. at 10 years old, there is nobody else in the market who has an old rye. given the time, it is better than any single malt scotch. >> this is in barrels, or are you aging it in bottles? >> no, no, when it is clear, goes into the barrel, dispense 10 years into the barrel before it goes out into the bottle. >> ok, so have you ever tried clear whiskey better known as moonshine? it turns out that tennessee white whiskey is so popular the company cannot even keep up with the demand, and that is despite

building one of the biggest custom stills in the world. jamey grosser is the guy who makes it. >> we are always fighting the stigma of moonshine, but in this 2000-square-foot facility, we have the ability to produce 1800 cases a month, and by the end of the summer, we will move into our new facility, 50,000 square feet, where we will be a will to do about 40,000, 50,000 cases a month, and that is really to give up with demand. we cannot make enough whiskey so the world's largest custom-built white whiskey still, we do it exactly 100% how popcorn always made it. most people do not know that moonshine is just untaxed whiskey. post-prohibition, the government wanted to make sure if you went to a liquor store to buy your liquor, they would get your taxes. so they try to convince americans that white was made in a carburetor and it would make you go blind.

popcorn has been making this for many years. >> i have made all kinds of liquor in my time. [inaudible] i even made some one-time and sold it to this couple, and they were so happy i made it. >> he took me under his wing and taught me exactly how to make this. we started it in a mason jar, but he always said my whiskey is too good to be in a mason jar, so as soon as we can afford it, we switch to the black bottle. >> you may need some moonshine if this is one of your corvettes. this is new video from the corvette museum in kentucky, eight cars, yeah, because there was a sinkhole. this is video from one of the security cameras the night it actually happened. ♪

>> it is approaching 56 past the hour. that means bloomberg television is on the market. i am julie hyman. let's take a look at where stocks closed. a gain for the day, curious given the fact that we had worse than estimated economic data. retail sales, jobless claims,

yet some corporate news. notably that time warner-comcast deal helped sentiment. the s&p, the dow and the nasdaq all finishing the day higher. game with leaving the a gain of about 0.9%. the vix went into the red. for more on the volatility index, from the floor of the cboe where the vix is traded. dan, we have had this kind of big swing in sentiment expressed in the vix. what was it, two weeks ago we were talking about record call options on the vix. then we went to record put options on the vix. people going from thinking it was to spike the plunge. what is going on? >> you're seeing a fair amount of unwinding of positions there. also, offense of plays. there was a lot of call buying in the november-december time period even into january where

we saw a lot of call buying. you saw the rivers of that. people rolling out of positions. we saw that first bounce off of those lows around that 1745 area. that was kind of a turning point where a lot of people felt like the vix has reached a peak. >> where do we settle out here? do we find some stability? >> right now, short term, it feels like it. at the cboe, we saw a lot of selling the last couple days. that plays into the mindset, the fact that we have that three-day weekend. there is only one trading day after tomorrow and that is why you are seeing at the short-term end of the curve, very altered. if you look at margins going up from there, you are seeing some call buying. you were talking about short-term also. vxstt to mention the starting to trade today. there is futures on that.

explain to us what that is. >> basically, it is just exposure to very short-term, nine-day exposure to spx weekly options. the index is based off of the spx weekly. it is a weekly mix of plays. it kicked off today, there will be options listed probably in the next quarter. tos gives you an opportunity play a board short end of the volatility spectrum. it is great for event type of activity. you can use it to play against the 30 day and longer dated options as well. >> back to the s&p, however your , what are you reading from the volatility right now and how do you take that back into what we might see happen with stocks? theight now, basically volatility we are seeing in the spx is fairly

elevated. the market is realizing more than what the vix is anticipating. that is one thing you can look at and say maybe the vix is a little too cheap. secondly, the vix reach the floor around the 14 level. the market has held onto those gains and build on those gains these afternoon. nevertheless, the vix was able to stay flat. >> got you. about the vixen volatility, appreciate it so much, dan. four on the markets, i am julie hyman. ♪